“The bank’s central scenario for the economy is that the condition for rate hikes will not be met before 2024“Minutes from the Reserve Bank of Australia (RBA) July meeting revealed on Tuesday.
Additional comments
The Board remains committed to maintain monetary conditions very supportive.
The recovery in the labor market had continued to be faster than expected.
It will not increase the cash rate until real inflation is sustainably within the 2-3% target range.
The bank’s central scenario for the economy is that the condition for rate hikes will not be fulfilled before 2024.
Compliance with the rate increase conditions will require the labor market to be tight enough to generate “materially higher” wage growth.
In light of the economic improvements and the agreed decision-making framework, Members decided to adjust weekly bond purchases from $ 5,000 to $ 4 billion.
The bond purchase program had been one of the factors underpinning the accommodative conditions necessary for the economic recovery from the pandemic.
Given the high degree of uncertainty about the economic outlook, Members agreed that there should be flexibility to increase or decrease weekly bond purchases in the future.
It is important monitor trends in home debt and ensuring that credit standards are maintained.
While a rebound in inflation and wage growth is expected, it is likely to be only gradual and modest.
Year-end CPI inflation is expected to be temporarily above target in the June quarter, but would decline thereafter.
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